Brown sues to shut down five O.C. charities

California Attorney General Jerry Brown sued more than a dozen charities for deceptive fundraising today. He wants to fine insiders at all of them and force some of the nonprofits to close their doors.

Among those he wants to shut: nine charities that The Register has investigated, five of them based in Orange County.

Brown's a little late with his shut-down demand for three of the charities: The Santa Ana-based Coalition of Police and Sheriffs, Disabled Firefighters Fund and American Veterans Relief Foundation said last week they were dissolving after the Federal Trade Commission sued them.

The state rarely shuts down a charity. It did so in 1999 when it closed several sham charities controlled by Orange County telemarketing king Mitch Gold, who later spent eight years in federal prison for fraud.

"We only use it (a shut-down order) when we have the facts to get it," Senior Assistant Attorney General Belinda Johns said. "But it's always in our arsenal."

Brown also wants to shut down the Santa Ana-based Association for Firefighters and Paramedics, the Fullerton-based Association for Police and Firefighters and the once politically prominent California Organization of Police and Sheriffs in Ontario.

He also wants to bar three closely related charities -- the American Association of Police Officers, the Police Protective Fund and the Junior Police Academy -- from operating inside California.

All of these groups, plus the others sued by Brown Friday, used telemarketers to raise money. In most cases his office alleged that the groups deceived donors about how their money would be spent.

Examples:

L.A.-based Law Enforcement Apprenticeship Program bought a 30-foot sailboat.

The Police Protective Fund included a $350,000 judgment paid to the state of Missouri as a program expense. The group paid the judgment for conducting improper solicitations.

The California Organization of Police and Sheriffs told donors it was raising $11.4 million in 2006, telling donors the money would help mentor at-risk children and buy bulletproof vests. Amount actually spent for those purposes: nothing.

"These individuals shamelessly exploited the goodwill of decent citizens trying to help police, firefighters and veterans," Brown said. "In point of fact, a shockingly small portion of donations went to those in need, while millions went to pay for aggressive telemarketing and bloated overhead."

The Coalition of Police and Sheriffs, Disabled Firefighters Fund and American Veterans Relief Foundation all were founded by Joe Shambaugh, a convicted federal felon and former six-year resident of Club Fed who has been on the lam for three years from a federal fraud indictment.

The lawsuit against those three charities also names their fundraisers and nearly two dozen current and former directors, employees and others.

"Those in control ... have been guilty of or knowingly countenanced persistent and pervasive fraud, mismanagement and abuse of authority," the lawsuit alleged.

The state wants $15 million in damages from the three charities and their insiders. It also is demanding at least $100,000 from each of the insiders.

Attorney Robert Moest, who represents the charities, said the state AG's office first questioned key employees in late 2006. If the state had told them then that something was wrong, they would have corrected it.

User Agreement

Keep it civil and stay on topic. No profanity, vulgarity, racial
slurs or personal attacks. People who harass others or joke about
tragedies will be blocked. By posting your comment, you agree to
allow Orange County Register Communications, Inc. the right to
republish your name and comment in additional Register publications
without any notification or payment.